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USS pensions: update on the JEP and USS Trustee

24 July 2018

Provost’s update on the developments from the USS Trustee and the progress made by the Joint Expert Panel (JEP).

Dear Colleagues,

Pensions update

I wanted to update you on developments from the USS Trustee and the progress of the Joint Expert Panel (JEP) which was set up to examine the USS pension valuation, and agree key principles to underpin the approach to be taken in future.

The JEP continues to make progress and you can find the minutes of its meetings published on our website. During the meetings, the JEP have heard insights from the stakeholder community on the valuation, the tests that underpin it, assumptions and process. The Panel continues to welcome contributions and should you wish to, you can submit these in confidence directly to submit@ussjep.org.uk

The JEP intends to be in a position to publish the outcome of its report in September 2018.

Because there is, as yet, no agreed way forward, and the statutory deadline for concluding the 2018 valuation has passed, USS has decided that it is obliged to run the cost sharing process in parallel to the JEP review. This is a process under the USS rules that takes a view of the amount needed to restore the financial health of USS where there is no other agreed way forward, and shares the increase in cost between employers (two thirds) and staff (one third).

This means that the USS trustee is likely to announce that a formal consultation process will start in September, before the JEP has concluded. The cost sharing process would result in much higher contributions to the USS pension scheme, and there are serious concerns about the long term affordability of the cost sharing agreement for both employers and staff.

We will continue to support the work of the JEP and hope that its report and discussions will lead to the vitally important secure and sustainable pension for the long-term that we are all looking to achieve.

The decisions that are made will have long reaching significance and so it is very important to me that we are able to discuss and debate our approach together. To that end, we will be discussing this issue at the next meeting of Academic Board, and the outcome of that discussion will form part of a paper we will take to Council, to help Council in agreeing its position.

In the meantime, I would like to encourage you to continue to share your valuable feedback, whether directly with the JEP, through Academic Board, or the leadership team.

Best wishes,

Professor Michael Arthur
UCL President & Provost